Colorado Guv cozies up to natural gas

Colorado Gov. Bill Ritter, a Democrat, is not known for being a friend of fossil fuels. Since his election in 2006, Ritter has ardently promoted renewable energy, such as wind and solar. More importantly, his administration has led the efforts to put a few brakes on the natural gas drilling rush that has rampaged through the state in the last decade. Soon after taking office, Ritter overhauled the Colorado Oil and Gas Conservation Commission – which issues and oversees drilling permits – to make it much less industry-friendly. Then, despite virulent opposition from Republicans and the gas industry, the new commission created regulations protecting water quality, wildlife and the public from drilling.

So it was a bit of a surprise this month when Ritter told oil and gas executives that natural gas should not be seen as simply a bridge fuel while the nation pushes for more renewable energy. He said that any state or national policy on renewables must be tied to climate change, and by definition that should include natural gas to help lower carbon emissions.

“Natural gas is a vital part of the new energy economy, a permanent part,” Ritter told hundreds at the Colorado Oil and Gas Association’s annual conference in Denver on July 9. “Not a bridge fuel, not a transition fuel, but a mission-critical fuel.”

Just a few days before Ritter uttered those words, he announced plans to apply for a $10 million federal grant to expand the use of compressed natural gas as a fuel source. And over the past few months, he’s also pushed the Federal Energy Regulatory Commission to approve the proposed $3 billion Ruby Pipeline project to transport natural gas from the Rocky Mountains to the West Coast.

On the surface, it may seem that after two years of battling industry, Ritter has suddenly realized that next year is an election year and that natural gas politics might play a big role in the outcome. In recent months, declining natural gas prices have led to a drill-rig exodus from the state. Some industry boosters blamed the industry’s flight – as well as the economic blow it dealt to gas-patch towns – on the state’s new regulations, rather than on the national economic downturn. That could give votes to either of the Republicans who are making a run for Ritter’s office: Former Congressman Scott McInnis and State Sen. Josh Penry, both of whom hail from Colorado’s drilling-dependent Western Slope.

The Ritter administration, however, says that’s not what is really going on here.

Climate change and the push for green energy are here to stay, his people say, and the fossil fuel industry had better get on board as quickly as possibly.

“This has been his position all along,” said Ritter spokesman Evan Dreyer. “We can have a healthy industry and we can have healthy communities at the same time. For too long, that hasn’t been the goal. That is the strategy, it’s the vision and it’s the goal under Governor Ritter.”

Ritter’s speech to oil and gas executives, Dreyer explained, was intended to be both a wake-up call and an olive branch -- a reminder that, as governor, he’s always touted development of fossil fuels at the same time he’s pushed for alternative sources.

Dreyer is careful in picking his words, trying to walk the fine line between upsetting the industry again and getting it to realize that Ritter’s new energy economy is more than politics; it’s policy.

“It’s what I’ve said, and it’s what he’s been saying all along, it’s going to take everybody working together to get the economy back on track,” Dreyer said. “Because natural gas is such a big part of Colorado’s economy, we have to be doing everything we can to increase demand, to increase consumption.”

Meg Collins, the executive director of the Colorado Oil and Gas Association, said that her industry is well aware of the importance of green energy. Still, she said that it was Ritter’s people, and not her own, who had to learn a thing or two about the role natural gas should play.

“I think that the oil and gas rulemaking really tested all those who participated in it,” she said. “At the end of the day, while industry still certainly has its challenges with the rules … all involved, particularly from the administration, really learned a lot about the importance of the industry and its contributions to the state.

“While I don’t want to go through that experience anytime soon, it really did in a painful way instruct folks about the industry. As the debate rolls on, it will become more clear that natural gas is not, as the governor said, a bridge fuel, but a mission-critical fuel.”

When it comes to the rules that the industry hates so much, Mike King, deputy director of the Colorado Department of Natural Resources, said the industry shouldn’t complain too loudly. Many of the rules were softened to its liking, including those dealing with a controversial industry practice known as hydraulic fracturing, or “fracking,” which uses secret chemicals to help extract natural gas.

King said that the Colorado Oil and Gas Conservation Commission completely rewrote the chemical-reporting portion to include language drafted by the industry. Under that rewrite, only those with a need to know -- such as medical personnel or state regulatory agencies -- can even find out what’s in those chemicals.

The commission also accepted a number of other changes pushed by the industry, such as reducing by 40 percent the number of wildlife species affected by drilling and dropping altogether a requirement to survey the number and variety of wild animals in an area targeted for drilling.

On the fracking issue, Colorado Democratic U.S. Rep. Diana DeGette has proposed stricter, federal-level regulations on the practice.

But in his speech to the industry, Ritter further earned kudos from its representatives when he announced that he was urging DeGette to back off from her position and do a study instead, something to which she hasn’t agreed. The new Colorado rules call for state monitoring each time hydraulic fracturing is done, with testing to make sure no damage was caused and a 24-hour reporting requirement in case something goes wrong.

Only time will tell how Ritter’s new strategy in dealing with the industry will play out. Although Collins said that her industry was enjoying its much-improved relationship with the governor, she stopped short of saying that it would not oppose him in his re-election bid next year.

“That election is a year and a half away,” she said. “The best that I can say is, I don’t know.”